From Longman Dictionary of Contemporary Englishcredit crunchˈcredit crunch noun [singular] a time when borrowing money becomes difficult because banks reduce the amount they lend and charge high interest ratesFrom Longman Business Dictionarycredit crunchˈcredit ˌcrunch noun [singular]BANKINGECONOMICS when borrowing money becomes difficult because banks are forced to reduce the amount they lendOne reason for the credit crunch is that bankers fear that regulators are more likely to classify loans as bad.